THE THREE ROBS
Dr. Rob Rodermund
Associate Professor – FinanceRob Westervelt
Vice President, Strategy and Innovation
Rob Patrick
Student who wanted honors credit
Agenda
What is a Budget?
Why Budgeting is important
• A History Lesson
• The American Dream
What Budgeting can achieve
How to Budget
What is a Budget?
BUDGET AND RECONCILIATION
Mar-21
BUDGET ACTUAL Difference
INCOME
Work $200.00 $0.00 -$200.00
Internship $650.00 $900.00 $250.00
Allowance from mom & dad $200.00 $300.00 $100.00
TOTAL INCOME $1,050.00 $1,200.00 $150.00
EXPENSES
Gas $100.00 $77.00 -$23.00
Cell phone $115.00 $115.00 $0.00
Groceries $40.00 $33.00 -$7.00
Auto expenses $40.00 $0.00 -$40.00
Credit cards $50.00 $75.00 $25.00
Laundry $10.00 $5.00 -$5.00
Hair cuts $100.00 $124.00 $24.00
Weed $53.75 $76.43 $22.68
Entertainment $100.00 $100.00 $0.00
Miscellaneous $150.00 $206.00 $56.00
TOTAL EXPENSES $758.75 $811.43 $52.68
NET SAVINGS/LOSS $291.25 $388.57 $97.32
RULERS OF FRANCE: 1643-1774A Story of Sex, Wars, and Buildings
Louis XIV 1st Duke D’Orleans(Louis XIV’s brother)
2nd Duke D’Orleans(Regent of France)
Louis XV
That’s all fine and good for a bunch of dead French guys who wore high heels, but what does that have to do with me?
Well, they didn’t have a budget.
The American Dream: “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement" (Adams, 1935, p. 214-215).Interpreting Adams’s words, one may conclude that achieving higher levels of net worth should simply be the result of an individual’s effort or intelligence, yet experts would dispute these conclusions.
• It does not appear that the hours of work or the effort expended are correlated with wealth and income (McNamee & Miller, 2004).
• Nor does it appear that intelligence, as measured by IQ scores, has a significant impact on net worth (Zagorsky, 2007; Griesdorn & Durband, 2016).
SOCIAL MOBILITY:“Every child had a pretty good shotTo get at least as far as their old man got” (Billy Joel, Allentown)
So Why are Wealthy People Rich?
• Rich parents• Gender • Race• They own a home • Married• They are pretty
The conclusion from several studies is that those with a higher net worth are likely to be older, male, white, married, and homeowners.
(Pfeffer, 2010; Ruel & Hauser, 2013; Campbell & Kaufman, 2006; Griesdorn & Durband, 2016).
What if I’m not a white guy from a rich family? What if I’m ugly? Am I destined to be poor?
•EDUCATION
•MANAGING YOUR MONEY: 1. SAVING AND INVESTING MONEY2. BUDGETING
(Tamborini, Kim, & Sakamoto, 2015; O’Neill, Xiao, & Ensle, 2017)
BUDGETING
• Keep track of how you spend your money.
• How well you meet your budget, match actual expenses to budgeted expenses, is a measure of performance.
• Helps curb potentially bad habits. Your decisions are in your face.